HMRC cuts mean £34bn in lost taxes, warns SNP

Sweeping closures of UK tax offices, which will see 2,500 jobs lost in Scotland, will undermine efforts to reduce the amount of tax that remains uncollected, the SNP has said.

SNP business spokeswoman Hannah Bardell. Picture: Neil Hanna

Party business spokeswoman Hannah Bardell suggested the majority of the UK’s tax gap of £34 billion could be made up by small and medium-sized enterprises (SMEs) having better advice and guidance on their tax affairs.

HMRC recently unveiled plans to close 137 tax offices around the UK, prompting fears it will undermine advice to firms and increase the errors and miscommunication that lead to tax remaining uncollected from SMEs, she said.

“Small and medium-sized enterprises account for the largest proportion of the overall tax gap, some £16.5bn, followed by large businesses with some £9.5bn,” Ms Bardell told MPs yesterday.

“The UK government’s plans to slash 137 local HMRC offices across the UK will inevitably have a knock-on impact on the ability of SMEs to access information and tax advice.”

Ms Bardell also highlighted the potential loss of up to 2,500 jobs in Scotland with the closure of offices in Aberdeen, Bathgate and Livingstone, Cumbernauld, two in Dundee, three in East Kilbride, three to close and consolidate in Edinburgh and two in Glasgow to consolidate into one large office.

She said this will leave businesses in areas of Scotland which rely on specialist local tax advice without the expertise needed to help ease their work.

Ms Bardell said: “Beyond the Central Belt of Scotland we have a wide range of industries including farming, fishing, whisky, tourism and indeed oil and gas.

“Many of these industries rely on the ability to work with their local tax offices, given the complexities of their businesses.

“For industries such as farming which often operate a year in arrears to very tight margins, I and my colleagues have very great concerns about the impact on them and indeed a wide range of other sectors, not least the small and medium enterprises of our countries.”

HMRC is planning to close 137 offices and replace them with 13 new regional centres.

David Gauke, Financial Secretary to the Treasury, confirmed the plans would result in some job losses.

“By 2027 when this process will have been completed, approximately 4,000 of the existing 58,000 people employed by HMRC will not be within reasonable daily travel distance to an HMRC office,” Mr Gauke said.